Tracking goes off-piste
Cigarette smuggling is high-profit, low-risk activity. Usually, only low-level traffickers are caught, while the masterminds escape justice.
A number of tobacco manufacturers are concerned that the EU wants to allow member states to designate their own product codes as part of a tobacco tracking and tracing system, according to a story by Jonathan Stearns for Bloomberg News.
The introduction of such a system, which is supposed to track cigarette packages from the factory floor to the retail shelf using electronic codes, has, in principle, been supported by manufacturers.
But they are said to be unhappy with the European Commission’s proposal to let EU countries deviate from the current industry standard for serial codes on products.
The Commission says any extra manufacturing costs caused by such deviations would be negligible.
But the discrepancy is said to threaten to create technical hassles for cigarette manufacturers and undermine track-and-trace technology investments that, in the case of British American Tobacco alone, are said by the company to have totalled £60 million pounds ($79 million) since 2014.
The tobacco industry would prefer a one-stop shop for European codes.
It wanted to avoid a non-harmonized ID format that would require different coding standards on the same packaging line, reported Stearns.
While packs destined for sale in more than one national market in the EU were already differentiated for language and images, differing codes would further complicate production.
The tobacco industry had expected its deals with the EU’s anti-fraud office to be the basis of the track-and-trace rules stemming from 2014 legislation.
“Our member companies have already invested hundreds of millions of euros in voluntary co-operation with the EU anti-fraud office to anticipate the need for tracking and tracing,” said Alisdair Gray, secretary general of the Confederation of European Community Cigarette Manufacturers, which includes BAT, Japan Tobacco International and Imperial Brands.
“The commission proposal paves the way for a highly complex system in which each member state works in isolation from the other.
“The system has been poorly thought through and may prove unworkable despite having over three years to establish it.”
Stearns’ story is at: https://www.bloomberg.com/news/articles/2017-11-19/big-tobacco-fumes-over-new-eu-salvo-in-cigarette-smuggling-war.
